Pemco Announces Agreement With HNA Group’s

Yangtze River Express and Hong Kong Airlines Cargo

DOTHAN, Alabama (January 29, 2010) – Pemco World Air Services (”Pemco”) today announced that it entered into an agreement to convert six 737-300 passenger aircraft to freighter configuration for Hainan Airlines, a subsidiary of HNA Group. Under the terms of the contract, signed in 2009, Pemco has already completed redelivery on two 737-300 aircraft conversions in October 2009 and January 2010. The third freighter is on schedule for redelivery at the end of the first quarter this year.

This agreement represents the second time China-based HNA Group has partnered with Pemco. In 2004, HNA Group and Pemco signed a $24 million agreement to convert multiple 737-300 passenger aircraft to freighter configuration. This agreement extends Pemco’s market leadership in China and its global installed base of about 80 737-300/400 converted aircraft. Pemco’s 737 freighter, quick change and combi modifications are the world’s only conversions which are fully designed using Boeing’s proprietary aircraft structures and systems data. Pemco’s 737-300/400 converted aircraft have flown 2 million safe, reliable flight hours with over 30 customers in more than 20 countries worldwide.

“We are honored that HNA Group, a leader in the Chinese civil aviation industry, has tapped us once again to help meet the growing demand for air cargo traffic in the Asia-Pacific region,” said Pemco CEO Wake Smith. “This partnership underscores the synergies between our companies and the strength of our leadership in the region.” Pemco President Kevin Casey commented, ”We look forward to providing HNA Group, and its subsidiaries Yangtze River Express and Hong Kong Airlines Cargo, with quality products to serve their customers for many more years.”

(HNA Group quote) (HNA Group executive name here), said, "HNA, together with Yangtze River Express and Hong Kong Airlines Cargo, selected Pemco’s Boeing-data-based 737-300 freighter modifications because they give us the advantage we seek as we expand our air cargo market share, particularly in the Asia-Pacific region. Pemco’s latest systems and component advances, together with structural advances that allow converted aircraft to remain in service for up 16,000 cycles between SID inspections--contribute to Pemco’s 737-300/400 freighters having the highest dispatch reliability, the lowest unit and trip costs and the highest retained value in the industry. These features contribute to our financial success now and as well as in the future.”

Headquartered in Hainan province, China, HNA Group’s portfolio includes passenger and cargo airlines, as well as hotels and airports, financial service providers, marine transport firms and retailers.

Pemco, the world’s leading narrow body aircraft cargo conversion provider and second most experienced cargo converter after Boeing, has operations in Dothan, Alabama, Tampa, Florida and partner operations in Asia. The company has performed more than 300 cargo conversions on 24 different aircraft platforms and conducted service maintenance and repair for a wide variety of aircraft for over 40 years. To learn more, please visit our website at www.pemcoair.com.

Contacts